Nonage Technologies, Inc is a life sciences start-up based on nanotechnology. The firm was founded by an unusually large number of people; five employees of the Eastern Institute of Technologies Advanced Materials Sciences Lab (AIMS). The founders worked in deferent sections of AIMS, but they were working on a set of technologies that were linked in the human genome project. Together, the founders developed techniques and compounds that caused the genes to ‘stretch out and straighten up’ making it much easier for labs to do the cutting and manipulation that Is required In diagnostic testing.
Nonage planned to use this technology, which Is owned by the Eastern Institute of Technologies, to begin to sell the patented substrate material to diagnostic testing labs around the world. As the business model of Nonage formed, the founders decided to equally split the equity among the five members and all of them would have the same salary of $120,000. Will Tompkins, one of the founders, was named the CEO. In the first year, Nonage secured the required intellectual property to the technology by offering the Eastern Institute of Technologies 15% in equity and a 3% royalty on sales.
Will Tompkins used one of his contacts, an active angel investor, to obtain the angel funding of $600,000 at $2. 25 million post-money valuation. The value proposition, customer segment, and revenue streams are fairly straight forward. Oneness’s technology offers their target customers, diagnostic testing labs around the world, an easier and faster way to complete diagnostic testing. The sales of the substrate material will provide Nonage with its source of revenue.
Currently, Nonage is trying to recruit Page Miller, a Havana Business School graduate who has been doing some consulting for Nonage. Additionally, Nonage is in their Series A funding. Nonage is looking to raise $10 million which will be sufficient to fund them for 18 months, to prove their technology, and to get them to a pilot production. At a meeting with a venture capitalist, Nonage learned about the issues Vs. have with the firm. The first concern the Vs. have involves the founding team.
The founding team is quite large, five members, and all of the founders are pure scientists with little to no business experience. Generally, the Vs. invest in technology based start-ups with a founding team of two to three members. Usually one of the founders has had experience driving the centralization of technology, typically as a Chief Scientific Officer at an established firm. The unique size of Oneness’s founding team and their lack of experience Is an area of worry for the Vs.. The Vs. are also concerned about the founding team’s decision to compensate all founders equally.
The scientists are splitting the equity evenly and are receiving a salary of $120,000 which Is, at a Mullen, $30,000 more than the annual salary of their former Jobs at AIMS. Vs. believe the founders and future employees should be compensated based on their deed value to the company; a strategy commonly practiced In the business world. Typically, biotech Coos have a higher salary and will retain about 2. 5 times as much equity as UP;level founders. The Vs. think Will Tompkins should be compensated more and the rest of the founders should be compensated less.
Nonage needs to address the Vs. concerns in order for Nonage to be a viable company. Page Vs. concerns. The founders have little to no background in business and have not been very professional as a team. In business, team members communicate and are not afraid to disagree with each other. With Nonage, the founders want to make everyone happy. The scientist agreed to compensate equally since it would have been disruptive in their opinion to try to determine equity share and compensation based on a more complicated set of principles.
Members didn’t want to upset the rest of the team. Additionally, the founders are already having disputes about how to compensate future employees. Nonage needs someone with business experience who can be professional and focus on the goal of the company. Page Miller has the business experience and personality Nonage requires. The only complication is re compensation of $175,000 in salary and 3% of the company equity. Page Miller can lead the company through the disagreements and difficult challenges they will face in the early stages of development.
Will Tompkins does not have enough experience to lead the company and commercialism the technology. The CEO should instead be Page Miller, who is more qualified than Tompkins. Instead of increasing Tompkins salary and share of equity, Nonage can compensate Miller. Installing Miller as the CEO will help solve the CEO payment issue and the lack of business experience found at Nonage. At present, the founders may not be happy about their smaller share of equity and potentially lower salaries, but in the long run, the action of making Miller CEO will pay off.
Miller has valuable knowledge of in counterclaiming technology and running a business, and can guide discussions on the hiring process, the potential compensation policies, the company goals, and company culture. She will also bring the professional touch Nonage needs. Miller is also one of the few people familiar with the technology and business ideas of Nonage since she has worked with Nonage in the past. Without Miller, Nonage may not get the funding they need to continue as a company.
Another top priority of Nonage is proving the technology. This can’t be done if there is no funding for the Vs.. In the future, Nonage should conduct more market research on diagnostic tests. Currently, Nonage has a simple value proposition with a very general customer segment. Nonage needs to identify specific customer segments of high growth and low competition. Research in other value propositions such as cost and accuracy will help also Oneness’s profitability.